In The Employee v. The Company and the Owner, 2017 BCHRT 266, the B.C. Human Rights Tribunal (the “Tribunal”) refused to dismiss a complaint despite a settlement agreement between the parties.
The Complainant started working for the Company in May 2017 on an on-call basis. Her job was to clean RVs. She was a 24-year old, single mother, with a grade 11 education. The Company was owned by a 62-year old man (the “Owner”). The Complainant also worked for another business on the same lot. That business was owned by Mr. S.
On July 17, 2017, the Complainant filed a complaint with the Tribunal alleging that the Owner had harassed her sexually (the “Complaint”).
Briefly, the Complainant alleged that on June 3, 2017, while the Complainant was cleaning a RV, the Owner entered the RV and made sexually suggestive comments to her, insisted that she needed a “massage”, rubbed her legs and her shoulders, asked if she wore panties, forcibly looked down her pants to check, and then commented on her underwear.
The Complainant told Mr. S about the Owner’s behaviour and said she was going to report it to the police. A few days later, the Owner apologized to the Complainant and Mr. S told the Complainant that the Owner wanted to give her a RV to live in and would pay her rent for three months.
The Complainant attempted to return to work but felt uncomfortable because the Owner kept coming into the RV while she was cleaning it.
Attempts to settle
Between August 9 – 17, Mr. S attempted to settle the issue on the Owner’s behalf and eventually offered the Complainant $500. The Complainant stated that she would withdraw the Complaint if the amount was doubled and she could keep her job. The Complainant and Mr. S then agreed on the sum of $800.
On August 28, the Owner asked the Complainant to meet him at the bank and while at the bank, the Owner presented the Complainant with a short settlement agreement, which they both signed. The gist of the agreement was that the Complainant would discontinue the Complaint in exchange for the sum of $800.
The Complainant alleged that she attempted to return to work but that Mr. S “laughed at her” by responding with “Work? What work? Work there?” etc.
When the Complainant informed the Tribunal that she would not withdraw the Complaint despite the settlement, the Company and the Owner filed an application to dismiss the Complaint.
The Tribunal recognized that there are strong policy reasons for holding people to voluntary settlement agreements and that allowing parties to pursue a complaint that has been settled, would undermine those reasons. On the other hand, the Tribunal noted that it had jurisdiction to hear a dispute even if parties have entered into a settlement agreement because “people cannot contract out of their rights under the Human Rights Code”. However, in these circumstances, the burden falls to the person who seeks to pursue a complaint despite a settlement agreement, to persuade the Tribunal that the purposes of the Code would be best served by allowing the complaint to proceed.
The Tribunal stated that in such situations, the Tribunal would consider a number of factors to determine whether a complaint should be allowed to proceed. These include: the language of the release, unconscionability (inequality of bargaining power and a substantially unfair settlement), undue influence, independent legal advice or lack thereof, conditions of duress (which may be related to the timing of the agreement, financial need, or other circumstances), and whether the party received little or no consideration for the release.
Applying the above factors to the circumstances, the Tribunal noted the following:
• the nature of the allegations, were serious;
• there was a large power differential between the parties – the Owner was 62 years old, he was the President of the Company and he had the power to hire and fire; the Complainant was 24 years old and had a grade 11 education and she was dealing with health, finances and housing challenges;
• the Complainant was alone with the Owner at the bank when she signed the agreement, she did not have any independent advice;
• the agreement was substantially unfair as the Complainant would have received much more than $800 if her Complaint was upheld; and
• the Complainant had wanted assurances that she would be able to keep her job; however, there were no such assurances in the settlement agreement and when she tried to return to work, she was belittled.
Accordingly, the Tribunal held that the purposes of the Code would not be best served by holding the parties to the settlement agreement and that the Complaint may proceed.
• A settlement agreement may not resolve a complaint, if it fails to satisfy the requirements described above.
• Give an employee sufficient time to review a proposed settlement agreement.
• Encourage the employee to seek independent advice.
• Consider whether the agreement is “substantially” fair considering the remedies that the Tribunal could award if the complaint is upheld and the nature and seriousness of the complaint.
• Consider engaging the services of a mediator to assist the parties with crafting a mutually acceptable agreement.